RAF CFO insists fund didn't err by switching to new accounting standard

The chief financial officer (CFO) of the Road Accident Fund (RAF), Bernice Potgieter, has stuck to her guns that the fund was not being errant by switching to a new accounting standard in 2021, which has since been ruled invalid by the court.

Potgieter was before Parliament’s Standing Committee on Public Accounts (SCOPA) on Tuesday, which is probing financial mismanagement and corruption at the fund.

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She said for years, the fund’s liabilities, believed to be around R500 billion, had been overstated and that the fund had just completed its latest financial statement still using the disputed accounting policy.

The RAF has spent almost R11 million in its legal battle with the Auditor-General over the change in its accounting policy, which reduces the fund’s liabilities by not including claims that have not yet been valued.

But Potgieter has insisted the fund did not defy the Accounting Standards Board (ASB) when it moved to the new policy determined to be more suitable for a social benefit fund.

“If, at this point, the ASB had given us an indication that we were not allowed to use IPSAS42 we would not have moved, but they certainly did not say so.”

Meanwhile, after several officials have over the past year dodged SCOPA on where the fund invests its money, chief investment officer Sefotle Modiba finally came clean.

“The money is with the Corporation for Public Deposits.”

The Corporation for Public Deposits is a subsidiary of the South African Reserve Bank.

Modiba said the reluctance to reveal where the fund’s money is saved was to protect it from having its bank accounts attached by disgruntled claimants.

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